CO 2 EOR, CCUS and the Horizontal Revolution in the Permian Basin

Transcription

1 CO 2 EOR, CCUS and the Horizontal Revolution in the Permian Basin A Presentation to the Colorado School of Mines October 18, 2018

2 CO 2 EOR, CCUS and the Horizontal Revolution in the Permian Basin 1. Why all the New Excitement? 2. It s All About Horizontal Shale Revolution.. But Wait. Not So Much 3. Overview of PB Progress 4. From the Field: Some Fascinating New Realizations/Case Histories 5. Setting the Stage for CCUS 6. Closing

3 What is all the Buzz About in the PB?

4 Millions of Bbls/Day For Maturing Basins Things Looked A Bit Dim for the Future Ten Years Ago In the PB, the Incremental Oil was from EOR and in-fill Drilling

5 But, Now There is a New Excitement out There? Millions of Bbls/Day

6 Why We are Feeling the Excitement Producing Unconventional Reservoirs Producing Unconventional Oil (More on this Later) The Explosion of Innovative Tools for Horizontal Completions Better Drilling Rigs and Bits for Faster Drilling

7 Reservoirs: Feeling the Excitement One Horizontal Well in a Section (mi 2 ) is Worth More than 16 Verticals This Quote comes from a flood guy and a former disciple for vertical wells To explain, lateral continuity of a reservoir has always been a big question. With a mile-long lateral, we can now witness the changes in both the oil and rock in a continuous fashion with the new, modern mud logs and Measurement While Drilling (MWD) tools.

8 Let s Look at the New Developments (but We ll Leave the Shale Excitement i.e., Unconventional Reservoirs) to Others and Concentrate on Conventional Reservoirs with Unconventional* Oil) * Also Known as Residual Oil

9 New Discovery (Realization) #1 Before 2000, the Bottom of an Oil Reservoir had to be a Transition Zone We Needed a More General Concept: Residual Oil Zones

10 New Discovery (Realization) #1 Before 2000, the Bottom of a Reservoir had to be a Transition Zone We Needed a More General Concept: Residual Oil Zones So What Causes a Residual Oil Zone?

11 Types of ROZs All Three of the Concepts below can be Thought of as Moving Oil and Water around in Conventional Oil Entrapment (Trap) in a Later Stage Tectonic Event after the Initial Oil Entrapment 1 st Stage Tectonics: Basin Subsidence, Oil Generation & Migration to a Trap Followed by: A Basinwide Tilt (Type 1), A Breached (and often Reformed) Seal (Type 2), or An Asymmetric Basin Uplift and Lateral Flushing (Type 3)

12 A Graphical Look at ROZ Creation Mechanics Type 1: Basinwide Tilt Type 2: Breached Seal Uplift in the West Type 3: Laterally Swept

13 How Common are ROZs?

14 We Are Still Looking for the Oil Basin Without ROZs It is Not the Permian Basin It is Not the Gulf Coast It is Not the Williston Nor the Bighorn Not the North Sea Nor the Cooper-Eromanga Not the Baltic Nor the Arabian And so on..and on

15 The Permian Basin San Andres Formation Case History

16 ROZ Type 3: The San Andres of the Permian Basin Pre-Laramide W E Re: Lindsay, R.F. (2001)

17 ROZ Type 3: The San Andres of the Permian Basin Today Re: Lindsay, R.F. (2001)

18 The Net Effect Was to Sweep What was a Massively Large Oil Trap in the San Andres. The Isolated Exceptions to the Sweep were Closures Atop the ROZ (Like the Wasson and Seminole Fields). In These Cases we Call the ROZ below the Main Pay Zone a Brownfield ROZ* * To Exploit the oil, Wells can be Deepened

19 If All the Mobile Oil is Swept Out, We Call it a Greenfield ROZ Since New Wells Need to be Drilled Direction of Sweep

20 Thanks to RPSEA, we were able to Map the Greenfields (aka Fairways of Sweep) Ref: RPSEA II Report oil-gas/ final-report.pdf

21 So How Do You Exploit the Residual Oil? EOR Mobilizes the Immobile Oil Just Like it Does after Man s Waterflood And, Hold on, more breaking news just coming in.

22 So How Do You Exploit the Residual Oil? EOR Mobilizes the Immobile Oil Just Like it Does after Man s Waterflood And, Hold on, more breaking news just coming in. If it Retains Enough Gas, Depressuring the Reservoir can Commercially Mobilize Some of the Oil CO 2 EOR Depressuring the Upper ROZ (DUROZ)

23 New Technology (Realization) #2 Brownfield ROZs are Being Exploited via CO 2 EOR There are 17 CO 2 EOR Projects Deepened into the ROZ at last count All are Within the Permian Basin All but one are San Andres Formation Carbonates A Greenfield ROZ CO 2 EOR Project has been Implemented We Estimate that over 20,000 bopd are Coming from the ROZ EOR Projects and ROZ Production is Growing Rapidly now Now Let s Talk about Depressuring the Upper ROZ (DUROZ)

24 New Concept ( Discovery ) #3 One Needs to Recognize that not all Residual Oil is Dead Oil If the Pore Volume Sweep is Minor, the ROZ Oil can have Considerable Solution Gas Over 200 Laterals are Currently Exploiting the Upper (lightly swept) San Andres ROZ Oil (DUROZ) Started in 2012 Those Wells Need only a Light Stimulation DUROZ Wells are Spread out over 6 Counties in the ROZ Fairways and are Making Over 40,000 bopd now and have Accumulated Almost 30 Million BO to Date There is Some Good Evidence that Other Formations also have ROZs and are Already Being Exploited via Horizontal Wells

25 The DUROZ Production Process

26 New Concept (Discovery) #4 Why on Earth Would Mother Nature s Water Floods Leave 30-45% Residual Oil Saturations? To Explain Why, We Need to Understand Biogeochemistry Do you Know How Microbes Live and Work? The Simple Explanation is that they Broker electron exchanges between Molecules An Observation and then a Common Example Will Help Explain

27 Hmmm? How Does this Happen? Data From Near Tall Cotton The Greenfield CO 2 EOR Project

28 Type 3 ROZ - Related Changes to the Reservoir Late Stage Rock Diagenesis Solubilizes Components from the Oil During the Sweep Souring of Oil Wettability Alteration

29 Key Biogenic Reaction Souring the Oil and Gas When Collecting In a Static Place (like an Attic) - Free Sulfur Deposits New Dolomite Surfaces Attract Oil over Water, Re: Oil Wettability

30 Wrapping Things up How Does All of this Relate to CCUS? Storing Large Quantities of CO 2 During CO 2 EOR is Now Widely Known and Better Understood Commerciality of CO 2 EOR with Concurrent Storage is On-going but Commercially Challenged on its Own Due to Long Payout Times and Competition for Funding from Higher Rate of Return Projects like the Shale Horizontals..But, Things are Changing. Tax Credits for CCUS in the U.S. are now Available (45Q) Huge Reservoir Targets for CO 2 Storage in ROZs are Now Recognized The Depressured ROZs Provide Huge Pressure Sinks and Reservoir Targets for CO 2 Injection

31 Takeways from this Talk? I hope you are Feeling the Excitement over the New Day in Oil and Gas? Steve Melzer Midland, Texas For More Information See:

32 Key References 1 The San Andres Play: Observations and Challenges in Horizontal Wells on the Central Basin Platform, Permian Basin, Alimahomed, F., Melzer, L.S. et al, SPE MS, Presented at the SPE Hydraulic Fracturing Technology Conf, The Woodlands, TX, USA, January ROZ Science, Activity Updates on Horizontal Depressuring the San Andres Formation and ROZ EOR, a Seminar at the 2017 CO 2 and ROZ Conference, Dec 2017, Melzer L.S. (editor and contributor), Midland Tx, 3 (RPSEA II) Identifying and Developing Technology for Enabling Small Producers to Pursue the Residual Oil Zone (ROZ) Fairways in the Permian Basin San Andres Formation, Coauthor with Trentham, R.C. & Vance. D. (2016) Research Partnership to Secure Energy for America and U.S. Dept of Energy Final Report, 4 (RPSEA I) Commercial Exploitation and the Origin of Residual Oil Zones: Developing a Case History in the Permian Basin of New Mexico and West Texas, Jun 2012, Coauthor with Trentham, R.C. & Vance. D. (2016) Research Partnership to Secure Energy for America and U.S. Dept of Energy Final Report, 5 Origins, Processes and Exploitation of Residual Oil Zones, (Director and Contributor), Seminar conducted at the 2015 CO 2 Conference, Dec 9, 2015 ( 6 The Origin and Resource Potential of Residual Oil Zones, SPE paper , w/ G.J. Koperna and V.A. Kuuskraa, presented at the SPE Annual Technical Conference and Exhibition, San Antonio, Tx Sept 24-27, Where it all Began - Stranded Oil In The Residual Oil Zone, Report sponsored by the United States Department of Energy, 2006 download report at

33 The Upcoming CCUS, CO 2 EOR & ROZ Conference Dec 3-6, 2018 Midland, Texas Monday EOR Carbon Management Workshop Tuesday A Close Look at the New 45Q (CO 2 Storage Tax Credit) Legislation Wednesday AM Field Trip to Kinder Morgan s Tall Cotton Greenfield ROZ CO 2 EOR Project (a One-of-a-Kind Project for the World) Wednesday PM Session Status of Horizontal Well Depressuring of the Upper ROZ and Well Completion Advances Thursday Sessons A Day full of U.S. and International CO 2 EOR Case Histories To see Agenda Details or Register go to

34 Thank you Time for Questions?